Financial Analysis and Economics Quiz
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Questions and Answers

Which of the following is a liquidity ratio used in financial analysis?

  • Equity Multiplier
  • Return on Assets
  • Cash Ratio (correct)
  • Debt to Assets Ratio

    • Is the statement 'The legal entity sole trader/sole proprietor refers to a person and not any legal entity' true or false?

  • False
  • Partly true and partly false
  • Cannot be determined from the given information
  • True (correct)

    • Which of the following can be identified as an economic factor in a PEST analysis?

  • Labor laws
  • Inflation rate (correct)
  • Research and development
  • Trade restrictions and tariffs

    • What does Economies of Scale mean?

    <p>Reduction in the average costs of production when output is increased</p> Signup and view all the answers

    Which of the following is considered as an internal financial resource?

    <p>Retained earnings</p> Signup and view all the answers

    Which of the following items is reported as variable costs?

    <p>Raw materials</p> Signup and view all the answers

    Which of the following situations may increase price sensitivity?

    <p>Having a higher total expenditure</p> Signup and view all the answers

    Which of the following objectives of pricing strategy would be considered inappropriate?

    <p>Achieving cooperative relation with competitors to share the market</p> Signup and view all the answers

    Penetration pricing is:

    <p>Typical in mass market products, like chocolate bars, food stuffs, household goods, etc.</p> Signup and view all the answers

    An agreement between independent, otherwise competing companies to regulate the price and sales conditions of the products or services they offer, is called:

    <p>Cartel</p> Signup and view all the answers

    Which of the following methods of evaluating capital investments considers the time value of money?

    <p>Net Present Value</p> Signup and view all the answers

    The legal entity sole trader/sole proprietor is characterized by:

    <p>Unlimited liability</p> Signup and view all the answers

    Liquidity ratios used in financial analysis include:

    <p>Cash Ratio</p> Signup and view all the answers

    Overheads (overhead costs) are also reported as:

    <p>Indirect costs</p> Signup and view all the answers

    Economic Profit:

    <p>Takes into account both implicit and explicit costs</p> Signup and view all the answers

    Equity in the Balance Sheet includes:

    <p>Capital stock</p> Signup and view all the answers

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